While indoor dining has dropped way down during the pandemic, food delivery has grown considerably. DoorDash and Uber Eats, the two largest delivery apps by market share both saw their sales double from the end of 2019 to the end of 2020.
But while it might be an easy decision for customers to use these third-party delivery apps, the decision for restaurants is not so easy. There is a lot to consider, and it’s not a one-size-fits-all solution.
It’s hard to think of a bigger restaurant success story over the last decade than Shake Shack. The high-end burger chain began as a hot dog cart in 2001 in New York City’s Madison Square Park by famed restaurateur Danny Meyer. The menu was handwritten written by Meyer on a single sheet of paper in about 10 minutes and is about 85 percent the same today.
But there’s so much more to this story. Like for three years after 9/11 that hot dog cart paid the bills at the crown jewel of Meyer’s restaurant empire, Eleven Madison Park. Or how he wasted over a million developing a line of French fries only to throw them away out of pure pride. If Danny Meyer is the heart and soul of Shake Shack, its longtime CEO Randy Garutti is the engine that powers it. Here’s how they built Shake Shack.
Tipping is a quintessential American custom. In the U.S. consumers tip for services ranging from baggage handlers at the airport to housekeepers at hotels. But according to some analysts, tipping has created an environment where restaurant servers are subjected to sexual harassment and low pay.
About 70% of tipped workers in the restaurant industry are women and about 45% are people of color. In a recent study by One Fair Wage and UC Berkeley’s Food Labor Research Center over 78% of restaurant workers reported witnessing hostile behavior from customers who were asked to follow Covid-19 safety protocols, more than 40% noticed a change in the frequency of unwanted sexual comments from customers and 83% said their tips had declined during the pandemic.
With Covid-19 leaving millions to do essential work for low pay there have been renewed calls for a $15 minimum wage and the elimination of the tipped minimum wage — the base salary for many restaurant workers. Forty three states, including Georgia, North Carolina and Texas, have a tipped minimum wage for workers who in some cases are paid as little as $2.13 an hour by their employer.
But many in the full-service restaurant industry oppose the proposed changes, saying they would lead to higher menu prices and fewer hours for workers. According to the National Restaurant Association, the pandemic has already enacted a devastating toll on the industry, wiping out 2.5 million restaurant jobs and more than 110,000 eating and drinking establishments in 2020 alone. Watch the above video to find out what the $15 minimum wage and the elimination of the tipped minimum wage would mean for restaurants and their employees.
Ghost kitchens are kitchens designed for delivery-only businesses, without dine-in areas or customer facing storefronts. The pandemic has ravaged dine-in eateries, and companies that have focused on delivery could come out on top if the current trends continue. Watch the full video to see why ghost kitchens are taking over the restaurant industry.
Here are some of the top Ghost Kitchens:
With a $10 million dollar investment from Google Ventures, Kitchen United has been one of the leanest (and fastest-growing) startups in the space. Founder Jim Collins has turned down hundreds of millions of investment dollars to focus on growing more organically. Currently, Kitchen United plans on conquering the global restaurant space — with 5,000 kitchens planned in the next four years.
All in all, Kitchen United offers a turn-key, light-capital model, delivering a complete, code-safe kitchen replete with appliances and cooking implements. All that’s left to do is to…cook.
The fastest-growing and most investor-friendly ghost kitchen startup, CloudKitchens, has already taken in over $400 million from investors. $150 million interestingly invested by its founder (former Uber superstar) Travis Kalanick. Like Kitchen United, CloudKitchens offers fully-equipped kitchens (branded as “smart kitchens”) for the delivery-only model. Honestly, you can’t ignore a project that Travis is a part of.
Another not-so-surprising entry into the ghost kitchen space is DoorDash, which has already premiered locations in San Francisco and Redwood City. Currently, DoorDash’s model is focused on catering to high-delivery areas for established brands like Chic-Fil-A, but we’re sure they have plans in the works for new locations, as well.
For the time being, DoorDash Kitchens is still in the experimentation phase, with only a few locations. And, like others on this list, it provides everything a restauranteur would need for a single monthly fee.
For the moment, we’ll set aside the possible conflicts associated with Uber’s ex co-founder Travis Kalanick — who’s also operating CloudKitchens. We’re sure that bridge will need crossing at some point if Uber expands its operations. For the time being, the ridesharing company has been keeping a low profile in the ghost kitchen space. To date, it has been testing ghost kitchens in a few markets, though it remains curiously reluctant to share the delicious details pertaining to its Paris operations.
Another new entry is Virtual Kitchen Co. — which already operates several successful ghost kitchens. They plan to open 15 more kitchens over the next few years, driven by $15 million dollar Series A. Again, Virtual Kitchen Co. offers a similar pricing structure: Restaurants can pay a monthly fee for everything.
The one small difference here is that Virtual Kitchen Co. seems to be targeting existing restaurants that want to enter the delivery space.
RB’s Top 100 Independents ranking is a measure of the highest-grossing independent restaurants. Only restaurant concepts with no more than five locations are considered “independents” for the purpose of this list (although it’s possible a restaurant that shares a name with a chain but is owned and operated separately would qualify, such as Smith & Wollensky in New York City). Rankings are based on gross 2018 food and beverage sales. Information was gathered through surveys. When data wasn’t provided, sales were estimated based on public information, similar concepts and other factors.
Burger King unveiled its new prototype last month, a prototype that it began working on shortly after the pandemic began. It features a much smaller dining room, or no dining room at all, along with two or three drive-thru lanes, walk-up windows and curbside lanes. Some of the options allow for the complete removal of indoor seating.
Burger King’s latest restaurant design assumes that customers will not go back to dine-in service.
It’s not as if the Miami-based burger chain’s latest prototype doesn’t feature indoor seats. But its restaurants are 60% smaller, meaning a much smaller dining room. And one version of it replaces the dining room altogether with patio seating.
But the design is heavy on takeout options, an acknowledgement that consumers have been shifting that way for some time and then went all-in on takeout during the pandemic. It features two or three drive-thru lanes, with digital menu boards and merchandising. A “living wall” provides a view into the kitchen interior featuring Burger King’s broiler. And there’s an external walkup window on the glass façade.
Ampia Rooftop (Ampia meaning “Space” in Italian) is a sprawling 4,500 Sq. foot outdoor rooftop terrace featuring individual greenhouses for a social distance dining experience, opulent clusters of colorful flower gardens, and Italian-themed art and décor dispersed throughout. Chef Michele Iuliano offers up an authentic Italian menu of lite casual fare, along with a selection of inventive seafood paninis.
Restaurant Business (August 1, 2020) – The first step was a name change. When New York City announced that restaurants could open for outdoor dining during Phase 2, the Iulianos changed the name from Gnoccheria Rooftop to Ampia—a move that gave it a distinct identity. Then they set about redesigning the space to satisfy all the restrictions.
The entire space was sprayed with an electrostatic sanitary coating, including the tables, chairs, bar and every touchable surface. The process sanitizes for up to three months. The pair also purchased a facial recognition thermometer and all the essential PPE specified in New York Gov. Andrew Cuomo’s Phase 2 guidelines.
Next, the space was reconcepted from the original 250-seat restaurant to an outdoor dining venue with a limited bar and food menu. The beer garden in the original plan had to be scrapped; it’s impossible to enforce social distancing in that kind of setting. Instead, tables were spread out and seating areas set far apart, accommodating 60 to 65 guests.
The regulations around social distancing state that if tables cannot be arranged six feet apart, a restaurant can use plexiglass dividers between them. But the Iulianos wanted to infuse Ampia with the same stylish elements that differentiate their other restaurants.
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